South Korea’s KB Kookmin Bank has reportedly injected cash into Indonesian bank Bukopin to acquire a controlling stake in the latter, Reuters has reported.
KB Kookmin has set aside an undisclosed amount for increasing its stakes in Bukopin, Indonesia’s banking regulator Financial Services Authority (OJK) said.
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By GlobalDataThe move comes at a time when the Jakarta-based lender is grappling with a cash crunch. The lender is due to hold a rights issue later this month.
Recently, in a stock exchange filing, Bukopin said that it had negative cash flows due to a drop in overall savings; however, it was working to increase retail deposits.
The bank also lowered its withdrawal limits, some bank customers told Reuters.
In the first quarter, Bukopin recorded IDR100.8trn ($7.23bn) in total assets and its non-performing loan ratio was 5.3%.
In a statement, Bukopin said that KB Kookmin Bank is currently awaiting approval from banking regulators in Jakarta and Seoul for proceeding with the acquisition.
KB Kookmin Bank is the subsidiary of KB Financial Group and currently owns 22% stake in Bukopin as its second-largest shareholder.
In a statement, KB Kookmin Bank Seoul official said: “We are currently working on the process to acquire the majority stake in Bank Bukopin in Indonesia, but we are not currently in a rush to complete the process.”
Reports suggest that an Indonesian conglomerate named Bosowa owns a tad more than KB Kookmin with 23% stake.
